The Exchanges

The most recognized stock exchange in the world is the New York Stock Exchange or the NYSE.   There  are,  however, many exchanges  throughout  the United  States that  all operate in a similar manner. Exchanges are dual auction markets. They provide a central marketplace where buyers and sellers come together in one centralized location to compete with one another. Buyers compete with other buyers to be the highest price anyone is willing to pay for the security, and sellers compete with other sellers to be the lowest price at which anyone is willing to sell a security. All transactions in an exchange- listed security that are executed on the exchange have to take place in front of the “specialist / DMM” for that security. The specialist / DMM is an exchange member who is the designated market maker in that security and is responsible for maintaining  a  fair  and  orderly  market  for  the  stock  in  which  they  specialize.  The Specialist / DMM stands at the trading “post” where all the buyers and sellers must go to conduct business in the security. This is responsible for the “crowd” that you see on the news and financial reports when they show the floor of the exchange. All securities that trade on an exchange are known as listed securities.

THE DMM ACTING AS A PRINCIPAL

Related Articles
  1. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  2. Tech

    What Are Centralized Cryptocurrency Exchanges?

    Most cryptocurrencies like bitcoin, Ripple and Ethereum are traded via centralized exchanges. Here's how.
  3. Investing

    Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
  4. Investing

    The Ins And Outs of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  5. Tech

    190 Cryptocurrency Exchanges: So How to Choose

    With the plethora of digital currency exchanges, how can an investor choose the right one?
  6. Tech

    5 Live Bitcoin Exchanges

    Learn about five of the largest bitcoin exchanges operating around the world in 2015, and discover the issues these exchanges are facing.
  7. Trading

    Dual And Multiple Exchange Rates 101

    Why would a country choose to implement dual or multiple exchange rates? It's risky, but it can work.
Frequently Asked Questions
  1. Why is there a negative correlation between quantity demanded and price?

    Learn what the law of demand is, the basic assumption of the law of demand and why there is a negative correlation between ...
  2. If an IRA owner dies after starting required minimum distributions (RMD) but the spouse is under 70½, can the spouse roll over the IRA into his/her own IRA, and stop RMDs until age 70½?

    If the IRA owner dies after the required beginning date (RBD) and his/her beneficiary is his/her spouse, the spouse beneficiary ...
  3. How do credit bureaus make money?

    Take a closer look at how credit bureaus make money, and learn about the kind of services they provide to both lenders and ...
  4. I make over $120,000/yr and my adjusted gross income precludes standard IRA contributions. My contributions to my 401(k) plan at work are limited to $18,500/yr. It seems I'm being penalized for my income. Are there other retirement savings options av

    Only your eligibility to deduct contributions will be affected. You may still make a nondeductible contribution up to the ...
Trading Center